2001 (9) TMI 113 - HC - Customs

Summary

Issues Involved:
1. Ownership and possession of the premises searched.
2. Proof of the seized articles being primary gold, gold ornaments, and gold of foreign origin.
3. Validity of the sanction accorded for prosecution.
4. Adverse inference due to non-examination of independent witnesses.
5. Defense claims regarding the ownership of the seized gold.

Issue-wise Detailed Analysis:

1. Ownership and Possession of the Premises Searched:
The petitioner contended that the premises searched did not belong to him but to one of his sons. The trial court, however, found that the petitioner was in possession of the premises at the time of the search. The evidence presented by the prosecution, including the ocular testimony of P.Ws 1 and 2, was deemed credible. The defense's documentary evidence (decree in the partition suit, record-rights, and sale deed) failed to prove that the house was not in the petitioner's possession. The court emphasized that possession, rather than ownership, was the crucial factor. Consequently, the trial court's finding that the petitioner was in possession of the premises was upheld.

2. Proof of the Seized Articles Being Primary Gold, Gold Ornaments, and Gold of Foreign Origin:
The prosecution claimed the seized articles were primary gold, gold ornaments, and gold of foreign origin. The trial court relied on the Panchanama (Ext. 3), the statement of D.W. No. 1 (Ext. 4), and the petitioner's statement (Ext. 5) to establish that the articles were indeed gold. The appellate court concurred, noting that the seized items were tested and found to be gold of more than 9 carats purity. However, the court found no evidence proving that the gold biscuit was of foreign origin. The prosecution failed to establish that the gold biscuit was imported, which was necessary to attract the provisions of Section 135(1)(b) of the Customs Act, 1962. Thus, the conviction under Section 135(1)(b) was deemed unsustainable.

3. Validity of the Sanction Accorded for Prosecution:
The petitioner argued that the sanction for prosecution was granted without due application of mind. The court found that the sanction order for prosecuting the petitioner under Section 135(1)(b) of the Customs Act, 1962, was indeed vitiated due to non-application of mind. However, the authorization for prosecution under the Gold Control Act, 1968, was found to be lawful and maintainable. The complaint filed by the Assistant Collector was thus valid under Section 97(1) of the Gold Control Act, 1968.

4. Adverse Inference Due to Non-examination of Independent Witnesses:
The defense argued that the prosecution's failure to examine independent witnesses should lead to an adverse inference. The trial court, however, found the evidence of P.Ws 1 and 2 sufficient to prove the recovery of the seized articles. The appellate court concurred, noting that the defense's evidence was deficient in disproving the prosecution's case. The court found no merit in the argument for adverse inference.

5. Defense Claims Regarding the Ownership of the Seized Gold:
The petitioner claimed that the seized gold belonged to one Satyanarayan Soraf and was pledged with him. The court noted that the petitioner failed to substantiate this claim with cogent evidence. The non-examination of Satyanarayan Soraf, who was a material witness, further weakened the defense. The court found that the petitioner failed to discharge the onus of proving that the gold belonged to someone else, as required under Section 98-B of the Gold Control Act, 1968. Consequently, the conviction under Section 85 of the Gold Control Act, 1968, was upheld.

Conclusion:
(i) The prosecution proved the search and recovery of gold ornaments and primary gold from the petitioner's possession. The trial court's findings on this issue were upheld.
(ii) The evidence did not prove that the seized gold biscuit was of foreign origin. The conviction under Section 135(1)(b) of the Customs Act, 1962, was set aside.
(iii) The authorization for prosecution under the Gold Control Act, 1968, was found to be lawful.
(iv) The petitioner's defense regarding the ownership of the gold was not substantiated. The conviction under Section 85 of the Gold Control Act, 1968, was maintained.

The criminal revision was allowed in part. The petitioner was directed to surrender and serve the sentence and pay the fine for the conviction under Section 85 of the Gold Control Act, 1968.